Venezuela debuted its new currency with five less zeros in the middle of a hyperinflation crisis
On Tuesday, the opposition called for a "national strike" against the economic plan of Nicolás Maduro.
Five zeros This is what the government of Nicolás Maduro subtracted from the Venezuelan currency , the bolívar, amid the hyperinflation in which the country is submerged since the end of 2017. The monetary reconversion is part of the "recovery and expansion" plan economic " devised by Maduro, who announced other measures to face the serious crisis, something that Chavismo will back this Tuesday with a mobilization, while the opposition will reject it with a " national strike " .
The notes of the new monetary cone that began to circulate this Monday in a holiday have denominations that are more adjusted to the national inflation that, according to estimations of the International Monetary Fund (the IMF), will close the year in 1.000.000%.
The implementation of the so-called 'sovereign bolivar' "is 100%," Maduro celebrated late at night in a video that aired on Facebook Live. "The banking system behaved like a champion! " He said.
Maduro argues that the new banknotes, whose highest denomination is 500 bolivars (about seven dollars on the black market currency), will be the starting point for a "big change". The previous ones were diluted by inflation and an accelerated devaluation.
However, specialists consider the program unviable, which includes an increase in the minimum wage of around 3,400% from September 1, a new exchange system that would begin with a macro-devaluation and increases in fuel and taxes.
Within the plan, Maduro expects to end the black market dollar and for this will establish "a single fluctuating exchange rate anchored to the petro (government cryptocurrency)", so he called today all private sectors "to come into play."
"We are all waiting to see what will happen, " 39-year-old merchant Maria Sanchez told AFP news agency after withdrawing a few of the new bills at an ATM. In the previous days, marked by uncertainty, there were nervous purchases as far as the pockets were held and also long lines at service stations before an announced increase in prices.
The Finance Committee of the Parliament, with an opposition majority, said that the conversion began almost out of date due to hyperinflation.
It is a "monetary reconversion that was practically out of date with the inflationary spiral that is added to the hyperinflation we are experiencing," said the commission's president, Rafael Guzmán. The legislator criticized that the Government does not accompany the accounting simplification with other measures to curb inflation.
" It seems that the forecasts of the IMF (...) are going to be short ", he warned when rejecting the economic announcements of Maduro.
The Federation of Chambers and Associations of Commerce and Production (Fedecámaras) of Venezuela said today that the companies are "at risk of bankruptcy" after the economic adjustments decreed by Maduro.
"Adjusting wages, although necessary, to be increased by an amount of 3,500% is totally unmanageable for an economy that is submerged in a severe depression." There is no level of economic activity, or cash flow in companies to be able to comply with this increase, "Fedecámaras warned.
Regional tensions over the Venezuelan exodus
The start of the Maduro program coincides with tensions over the massive exodus of Venezuelans (2.3 million fled the crisis, according to the United Nations).
Brazil sent troops to its border after residents of the border town of Pacaraima burned encampments on Saturday for Venezuelan immigrants, who have arrived en masse in the past year.
The new measures "will only worsen the lives of all Venezuelans," the vice president of the United States, Mike Pence, wrote on Twitter on Monday, asking the Chavez government, which he calls "tyranny", to allow international aid.
Ecuador began on Saturday to block the passage of Venezuelans on their borders by requiring passports instead of identity cards and Peru adopted a similar measure. Colombia fears that thousands will be stranded in its territory.
The OAS Secretary General, Luis Almagro, asked to "keep the doors open to the people of Venezuela, victim of the worst humanitarian crisis that the continent has seen."